Seymour Schulich

Seymour Schulich is a Canadian billionaire businessman, investor, and philanthropist, renowned for his immense success in the natural resources sector and his straightforward, powerful investment philosophy. While often associated with oil, gas, and mining, his principles extend far beyond commodities, offering a masterclass in wealth creation applicable to all investors. He co-founded Franco-Nevada, a pioneering gold Royalty Company, which brilliantly minimized the risks typically associated with mining by focusing on collecting royalties rather than operating the mines themselves. This focus on innovative, low-cost business models is a hallmark of his approach. Schulich distilled his decades of experience into a set of clear, actionable rules in his book, Get Smarter: Life and Business Lessons. His philosophy is a powerful blend of Value Investing discipline, entrepreneurial insight, and a deep understanding of what makes a business truly durable and profitable. For the ordinary investor, Schulich is a “super-investor” whose practical wisdom can help cut through the market noise.

Born in Montreal, Quebec, Seymour Schulich earned an MBA from McGill University and became a Chartered Financial Analyst (CFA). His career began in the oil and gas industry, where he managed a successful pension fund and built his initial fortune. However, his most significant achievement was co-founding Franco-Nevada with his business partner Pierre Lassonde in 1983. Instead of digging for gold, Franco-Nevada bought royalty interests from other mining companies. This meant they would receive a percentage of a mine's future revenue or production without having to bear the enormous operational costs, risks, and capital expenditures of exploration and development. This model gave them a diversified portfolio of claims on some of the world's best mineral deposits, generating incredible Cash Flow with very low overhead. The company was a massive success, eventually merging with Newmont Mining before being spun off again as a public company. Schulich's genius was in identifying and scaling this superior business model, proving that how you invest can be more important than what you invest in.

Schulich’s investment strategy is grounded in common sense, discipline, and a focus on fundamental business quality. He is not a trader who follows fleeting market trends; he is a business-focused investor who buys for the long haul. His rules are a testament to this durable approach.

Here are the celebrated principles that guided Seymour Schulich to billions in wealth. They serve as a brilliant checklist for any aspiring value investor.

• Invest in Industries You Understand. Similar to Warren Buffett’s concept of a Circle of Competence, Schulich advises investors to stick to what they know. If you can't explain the business to a teenager, you shouldn't own it.
• Your Best Investment is Your Own Business. This rule emphasizes the power of being an owner-operator. For those who aren't entrepreneurs, the lesson is to adopt an owner's mindset when buying stocks.
• Diversify Your Investments. Schulich is a strong believer in not putting all your eggs in one basket. Proper Asset Allocation and Diversification are your primary defense against unpredictable risks.
• Never Invest in Anything With a High-Cost Structure. This is a critical insight. Businesses with high fixed costs are vulnerable in downturns. Schulich seeks lean, efficient companies that can remain profitable even when revenues dip.
• Invest in Management With a Significant Stake. He wants to see leaders who have their own money on the line. When management's financial interests are aligned with shareholders', they are more likely to make prudent, long-term decisions.
• Invest for the Long Run. Forget trying to time the market. Schulich buys great businesses with the intention of holding them for years, allowing the power of compounding to work its magic.
• Always Have Some Cash on Hand. Cash is not trash; it's opportunity. Holding a cash reserve allows you to be “greedy when others are fearful” and buy wonderful assets at bargain prices during market panics.
• Recognize That Nobody is Right All the Time. Humility is an investor's greatest asset. Be prepared to be wrong, learn from your mistakes, and cut your losses before they become catastrophic.
• Never Get Emotional About an Investment. As a key tenet of Behavioral Finance, this rule warns against the destructive emotions of fear and greed. A rational, systematic approach to Due Diligence is essential.
• Don’t Believe Everything You Read. Cultivate a healthy skepticism and think for yourself. Do your own research rather than blindly following “hot tips” or media hype.
• Focus on the Three Most Important Criteria. Schulich's '3-G' formula for a great investment is simple: Great Management, Great Assets, and Great Luck. While you can't control luck, you can position yourself to benefit from it by getting the first two right.

While you may not be investing in gold mines, Seymour Schulich’s philosophy is universally applicable. His success story offers three powerful takeaways:

1. **Focus on the Business Model:** Before you buy a stock, scrutinize the business. Is it a low-cost producer? Does it have a durable competitive advantage? Franco-Nevada’s royalty model was a game-changer because it was structurally superior to its competitors. Look for businesses with similar structural advantages.
2. **Bet on the Jockey:** As Schulich emphasizes, management is crucial. Look for experienced leaders with a proven track record and significant "skin in the game." Read shareholder letters and proxy statements to understand if their interests are truly aligned with yours.
3. **Discipline is Your Superpower:** The common thread in Schulich's rules is discipline. The discipline to stay within your circle of competence, to hold cash patiently, to avoid emotional decisions, and to do your own homework. In a world of endless financial noise, this disciplined mindset is what separates successful investors from speculators.